The Globe and Mail reports in its Wednesday edition that while National Bank's Matt Kornack hiked his rating for Allied Properties REIT to "sector perform" from "underperform" in response to its "welcome" distribution cut, he cautions that further improvements to its balance sheet are still needed. The Globe's David Leeder writes that Mr. Kornack trimmed his target for Allied units by $1 to $13 to "reflect a larger discount related to an erosion in perceived management credibility resulting from capital allocation decisions and a reversal on distribution sustainability messaging." Analysts on average target the units at $15.75. On Monday, the REIT cut its monthly payout by 60 per cent (to six cents per unit from 15 cents) to focus on debt repayment, marking a reversal after management had reassured investors in August about maintaining the payout. Mr. Kornack says in a note: "We have been proponents of a distribution cut for some time in order to better position the REIT for a slower office recovery and in light of balance sheet deterioration arising from recent development/acquisition activity. This provides more time to bridge the gap to condo deliveries, asset sales and the wind-down of the loans receivable program."